“Latin America’s moment has arrived” among global venture capital

“Latin America’s moment has arrived” among global Venture Capital, Softbank confirms $1B investment in Colombian startup Rappi, President Pinera invites China to use Chile as its Latin American business hub and more from LatAm…

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June 3, 2019

“Latin America’s moment has arrived” among global venture capital

Latin America Private Equity and Venture Capital Association’s (LAVCA) annual report reveals that VC funding in Latin America nearly doubled in 2018 to a record $1.98 billion. In 2017, venture investment in the region accumulated $1.14 billion: quadruple the $500 million invested in 2016.

Photo courtesy of Crunchbase

                                                   Photo courtesy of Crunchbase

In addition, co-investments between global and Latin American investors are on the rise, making up 59%, or $1.2 billion USD worth of venture capital investment.

According to  Julie Ruvolo, director of venture capital for LAVCA,

“One of the significant things that has shifted is the presence of global investors, and notable ones too, in the market… Latin America’s moment has arrived” (Crunchbase)
Photo courtesy of Crunchbase

                                                    Photo courtesy of Crunchbase

As shown in the graphic above, Brazil led the region across all stages of VC investment, capturing 55.9% of investment in 2018 with 259 startup investments totaling $1.3 billion.

Mexico was the second most active market in terms of number of deals with 95 startup investments totaling $175 million. Meanwhile, Colombia saw nearly double the money invested with $334 million over 19 deals.

Federico Antoni, co-founder of Mexico City-based VC firm ALLVP, calls Latin America the world’s “largest untapped VC opportunity.”

“Mexico is Amazon’s fastest market to reach $1 billion in sales, Sao Paulo is Uber’s largest city in rides in the world, Mexico City holds Spotify’s biggest user base, and Brazil and Mexico are Facebook, Instagram and WhatsApp’s largest markets”

Softbank confirms $1B investment in Colombian startup Rappi

This Tuesday, SoftBank Group Corp. confirmed a $1 billion investment in Latin American delivery app Rappi.

Rappi’s latest investment round, the largest ever for a Latin American tech startup, brings the company’s total raised to date to an impressive $1.2 billion.

According to a press release, SoftBank plans to transfer the Rappi investment to the Innovation Fund “upon the fund’s establishment” (Tech Crunch).

The SoftBank Group and affiliated Vision Fund will both invest $500 million. Jeffrey Housenbold, managing director at SoftBank responsible for investments in Brandless, Opendoor and DoorDash, will join Rappi’s board of directors.

Rappi co-founder Sebastian Mejia made a statement, explaining

“SoftBank’s vision of accelerating the technology revolution deeply resonated with our mission of improving how people live through digital payments and a super-app for everything consumers need… We will continue to focus on building innovations for couriers, restaurants, retailers and start-ups that translate into new sources of growth”

President Pinera invites China to use Chile as its Latin American business hub

Last Thursday. Chilean President Sebastian Pinera kicked off an investment forum in China with an invitation for the country to use Chile as a “jumping off point” to do business in Latin America.

During the forum, President Pinera explained that Chile’s objective was to attract more investment from Chinese companies in technology, electric vehicles, telecommunications, and e-commerce.

According to a Chilean government statement, Pinera told Chinese investors,

“We want to transform Chile into a business center for Chinese companies, so that you can, from Chile, reach out to all of Latin America”  (Reuters).
Photo courtesy of Reuters

                                                        Photo courtesy of Reuters

Chile is one of the world’s largest producers of lithium: a key ingredient in electric vehicle batteries. Pinera met with several Chinese electric vehicle makers, including BYD and Yutong.

The Chilean President also met executives from Chinese ride-hailing company Didi Chuxing, which is planning to take on rival Uber in some Latin American markets, including Chile.

Brazil’s push to be a leader in the development of flying car market

According to executives from Embraer’s Atech subsidiary, Brazil wants to lead the development of the flying car market.

Marcos Resende, director of technology at Atech, stated that

“We are already anticipating, preparing a vision and a concept of how we will be able to see the future of the future. It will be air traffic. This is what our project will be” (Riot Times).

This month in Rio de Janeiro, a press conference was held at the most important defense and security trade show in Latin America, where representatives unveiled details involving eVTOL.

Atech’s president Edson Mallaco said,

“In Brazil, specifically, there are large metropolitan areas with very great potential to develop urban mobility solutions discussed. São Paulo and Rio de Janeiro have huge traffic problems and bottlenecks. There is great potential for it to develop here”
Photo courtesy of Riot Times

                                                          Photo courtesy of Riot Times

“Embraer’s flying car, eVTOL is being developed by another segment of the Brazilian company, Embraer X, and has had its first sketches shown earlier this year at the South By Southwest (SXSW) innovation festival in the United States.”

São Paulo-based startup Escale raises $22.6 million investment

QED Investors and Invus Opportunities just led a $22.6 million investment in São Paulo-based tech company Escale.

Escale is a digital marketing agency that partners with Brazil’s largest brands to optimize their customers’ buying experience using data. The company has over 500 employees and works with clients such as NET, Claro, Sul america, Bradesco, GNDI, and Amil.

“Escale partners with Brazil’s largest brands and, powered with data from millions of prior consumer interactions, transforms normal sales funnels into highly-efficient, digital buying experiences” (LAVCA).

In 2019, Escale will acquire over R$2.0 billion reals of incremental customer life-time revenue for its brand partners, a number has more than doubled every year since the company’s founding.

Matthew Kligerman, CEO of Escale, stated that this new capital will be invested into the data platform to improve customer experience and expand into areas such as consumer finance, insurance and education.

“We’ll invest heavily in our technology and data platform to ensure a more efficient and transparent online-to-offline buying experience for consumers. We’ll deepen our relationships with brand partners in the telecom and health insurance markets, as well as expand into consumer finance, insurance, education and other markets. And we’ll continue expanding our demand generation volumes to deliver even more customer prospects to our brand partners’ sales funnels” (Lat Am List).

Nissan Mexico partners with Mercado Libre to create online store for car buying

Nissan Mexico launched an online store in collaboration with Latin America’s e-commerce giant, Mercado Libre, where users can easily purchase cars.

This new online platform offers models like Nissan Kicks, Sentra, Nissan X-Trail, Versa, Nissan NP300, and Nissan.

According to Amelie Mossberg, Mercado Libre Motors’ Director,

“At Mercado Libre, our main objective is to create and offer our clients secure online solutions, excellent prices, payment solutions, variety of products, and the possibility to search and choose the car of their dreams” (Lat Am List).

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